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Connecticut House approves ban on variable-rate electricity contracts

By: Luther Turmelle |

The Connecticut House of Representatives voted overwhelmingly Wednesday to approve passage of a bill that would ban variable-rate electric contracts for residential power customers.

The 144-1 vote — State Rep. John Piscopo, R-Thomaston, was the only lawmaker who voted against it — sends Senate Bill 573 to Gov. Dannel P. Malloy’s desk. David Bednarz, a spokesman for Malloy, said the governor is expected to sign the bill.

The state Senate approved SB 573 last week. After the governor signs the bill, it will take effect Oct. 1.

State Rep. Lonnie Reed, D-Branford, called SB 573 “a pro-business bill” because it prevents companies from using deceptively low “teaser” electric rates to lure customers to sign up. Once a customer has signed up for a variable-rate contract, the introductory rate typically disappears a short time later, replaced by one that is exponentially higher.

“By banning the bait-and-switch tactics of a few bad actors, we are not only protecting customers, we are protecting the industry’s reputation and ability to do business,” Reed, who is House chairwoman of the General Assembly’s Energy and Technology Committee, said in a statement.

John Erlingheuser, advocacy director for AARP Connecticut, said state lawmakers have “made it clear that variable electric rates have no place in the residential market.”

“What we’re saying with this vote is that these types of contracts are predatory, that they are bad,” Erlingheuser said. “What makes them especially bad is that they are not tied to any set of economic indices.”

The legislation also includes provisions for Connecticut’s Public Utilities Regulatory Authority (PURA) to establish a process to determine what happens when a customer of a third-party electric power provider has their contract expire and does not taken any action to renew it, he said.

“There are all kinds of things the third-party provider could to if that happens, including putting customers in a rate that changes from month to month,” Erlingheuser said. “Maybe what makes sense is to have the customers revert back to standard offer service, but that’s why it is important for PURA to review this.”

This is the second year in a row that Connecticut lawmakers have approved legislation to protect electric consumers. The General Assembly passed Public Act 14-75 last year, which included a requirement that every residential electric customer’s monthly bill must display their rate for the coming month.